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Messages - BuddyJ

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Energy / Re: Fracker Debt Bubble
« on: September 26, 2019, 05:27:42 PM »
So this article really isn't about shale drillers going bankrupt and their wells being taken over by someone else after bankruptcy or whatnot, it is about orphaned wells? Orphaned wells have programs dedicated to handling them, and they are certainly too small. But that is a regulatory thing, and should have been cleaned up decades ago. Governmental and regulatory incompetence is the category this problem fits into.

Energy / Re: Hills Group Oil Depletion Economic and Thermodynamic Report
« on: September 25, 2019, 04:06:19 AM »
A fine detailing of just another one of the mechanisms that is likely to be involved in peak demand. It isn't as though the big think tanks have been calling for a peak demand scenario for the fun of it.

Energy / Re: 🛢️ Oil Resource Wars
« on: September 25, 2019, 04:02:49 AM »
Lying? Or just covering their bases to make sure that faith in the House of Sauds' ability to keep the black gold continues unshaken? The latter seems like a better characterization, and there are more than a few reasons why this can be happening that fall under CYA. By definition a cartel is all about market manipulation, and Saudi is about the only swing producer left within the cartel, so at this point they are the cartel.

My guess at this point is that stopping the next attack is more important than whatever they need to squeeze through the consequences of the last one.


Climate change: Did we just witness the beginning of the end of Big Oil?
Published Sun, Sep 22 2019 9:00 AM EDT
Eric Rosenbaum  @erprose

The short answer, of course,


Seems more reasonable.

It's all the fault of the Millenials!  ::)


Millennials Really Do Ruin Everything, And Big Oil Is Next
By Julianne Geiger - Sep 22, 2019, 4:00 PM CDT

The trend is clear, the oil industry really does have a millennial problem—and it won’t be fixed overnight.

By Julianne Geiger for

She could have just recommended people watch one of Tony Seba's video on the subject, he does the upcoming change, including peak oil and technological change and whatnot, quite well.


Climate change: Did we just witness the beginning of the end of Big Oil?
Published Sun, Sep 22 2019 9:00 AM EDT
Eric Rosenbaum  @erprose

The short answer, of course,

Energy / Re: 🛢️ Will Shale Rise From The Dead?
« on: September 22, 2019, 01:25:07 PM »


Quote from: Kurt Cobb
By Kurt Cobb - Aug 12, 2019, 12:00 PM CDT

Will shale oil rise again from the dead as it did after the 2014-2016 price decline? That will happen only if two things occur: 1) The oil price rises significantly and 2) investors have a serious bout of amnesia.

By Kurt Cobb via

US production wasn't dead before 2014, or during the 2014-2016 time period. I wonder what Kurt means this time? His list of things that the detractors claimed in advance seems a bit cherry picked, and avoids the thing he really doesn't want to talk about at all...otherwise known as Saudi America. There has certainly been a cost....and most certainly a benefit. How can you even measure the value of what the US was able to do to global oil markets, the savings to the consumer, and all through private enterprise rather than the gubbermint getting involving and screwed it up?

Energy / Re: 🛢️ Oil Resource Wars
« on: September 21, 2019, 05:29:26 PM »
My vote is for Don The DimWitted to keep kwetching and trumpeting how tough sanctions are because he doesn't want to get involved in more Middle East shenanigans.

Energy / Re: 🛢️ A Fracking Ban Will Never Happen
« on: September 21, 2019, 05:27:04 PM »
Yes, demand does increase due to the fact that population continues to increase.  It's the RATE of increase that falls below expectations for growth, and that's what kills the investment because you need the constant growth to cover the interest on the investment.  That's why it is a Calculus problem.

What is the expectation for growth? According to CSIS, Rystad, WoodMac and Barclays, it is slowing to zero, and then going negative. I don't know what that means for who is covering what interest. Certainly if folks want less, less will be produced, and we have a different relationship for price as demand and production see-saw downwards. A good thing for the environment.

Quote from: RE
The production increases, but the profitability from that production is falling.  Episodes like this perform the function of a Goalie doing a Stick Save.  But eventually, too many Pucks are going to be flying at the Goalie's head, and he can't stop them all from reaching the net.


So how does your idea work in the expected decreasing demand scenario that the think tanks are putting out there for discussion right now?

Energy / Re: Oil Glut: IT'S THE DEMAND, STUPID!
« on: September 21, 2019, 05:18:01 PM »
As go the rigs, so goes the production. Rigs are wonderful leading indicators.

« on: September 19, 2019, 05:26:04 AM »
Great visuals. The top North American/northern hemisphere US change doesn't look like it matches the North America/US one at the bottom though. A whole bunch more appears to be gone in the top map.

Energy / Re: Oil Price Crash: Who Cooda Node?
« on: September 18, 2019, 06:14:49 AM »
Until the current peak demand problem sorts itself out (assuming it does), oil prices have nowhere to go but down until A) enough marginal (mostly US) production comes off line or B) OPEC chooses to cut production more than they already have.

The good news for OPEC being that as US production decreases, OPEC can replace it at a price below that of the US marginal barrel, keeping it off-line. Doesn't cure government take problems in those countries, but at least they can get back in control of price.

Energy / Re: 🛢️ Oil Resource Wars
« on: September 16, 2019, 01:20:47 PM »
I'm betting it won't go on all that long though, unless the attacks can continue and combo of Saudi Arabia and America don't join forces to pound on the Iranians. THAT could be a long term screwed up mess. But if attacks stop, and no one bombs Iranians, I don't believe it will be much of a long term thing.

You forgot a couple of Major Players at the poker table.

If indeed the FSoA teamed up with the Saudis to bomb Iran back to the Stone Age, you won't see the Ruskies or Chinese sitting on the sidelines for that one.

Maybe. Then again, both of them combined are not capable of power projection at the scale that the US alone can manage in that area. Let alone mount enough of a defense of Iran fast enough to stop any American attack.

Sure, both can nuke things, but they won't. And we are only talking about Iran, Russia certainly has no oil import worries (unlike China), and China can afford to buy what they need on the open market. Other than the global cred they get joining sides against the big, bad US, there isn't much upside for them at all. Plenty of downside as well, remember those poor Russia mercs who went against some US spec ops in the Syria desert? That went so badly that Russia refuses to even admit they were theirs.

Quote from: RE
There is your scenario for WWIII and Global Thermonuclear War.


A high impact event for sure. But extremely low probability.

Energy / Re: 🛢️ Oil Resource Wars
« on: September 16, 2019, 08:13:58 AM »
This could really be an interesting and potentially profitable event for American producers, right?

First, we have OPEC cutting back production because the US has plugged in a new 5+ million barrels a day over the last half decade or so, and without the ability to control free market oil supply, OPEC can only cut back there own to maintain prices.

So they do this...keeping the market near a $50-$60 window...and suddenly now we've got an attack on production that will decrease it, causing the expected price increase, and presto! Suddenly, the companies in the US that have been hanging on by their fingernails get a windfall, allowing them to stave off possible bankruptcy in the near term, maybe even continuing to grow production, and when the Saudi's get ready to come back online at full production? It isn't needed! Between decreasing demand, the US doing its best to span the gap, and presto! Now we've got the Saudi's production constrained because they aren't willing to crash the price.

It is like the dynamics of 1986, except the Saudi's this time have to try and stomp out American industry and the shale revolution.

Definitely the shot in the arm that the high EROEI producers needed.

And even better than that, a direct cash infusion to the corporate bank accounts!

I'm betting it won't go on all that long though, unless the attacks can continue and combo of Saudi Arabia and America don't join forces to pound on the Iranians. THAT could be a long term screwed up mess. But if attacks stop, and no one bombs Iranians, I don't believe it will be much of a long term thing.

Quote from: RE

 However, it still only impacts around 5% of the current global supply.  The glut remains due to falling demand, or rather "less than expected" growth.


Peak demand is expected to be within the decade, but I've got no objection to it arriving sooner rather than later.

Energy / Re: 🛢️ A Fracking Ban Will Never Happen
« on: September 16, 2019, 08:08:42 AM »
economics can only kill it if folks stop using oil and natural gas.

No, economics kill it because it can't be extracted at a price enough consumers can afford to pay.  Price goes up, demand goes down, glut ensues, prices fall, rinse and repeat until you hit bottom.


Okay, so we've seen two of those cycles since the Great Recession. The one that hit its height in WTI at $145/bbl in July of 2008 and nadir in February of 2009 at $34/bbl. So that would be the crashing demand, followed by glut and low prices.

Price then increased into the $100+ range from 2011-2014. Demand didn't decrease, it increased.

This appears to be more of a cycle, not hitting a bottom, but bouncing around, and for reasons far more substantial than whether or not some company or another decides to do hydraulic fracturing. If memory serves, that entire high price period just about created the US shale revolution, and that revolution grew oil and gas production even more once prices went DOWN. That production caused a drop in price, and demand just kept increasing through the 2014-2018 time period as well. So the relationship of volume and price didn't even do the cycle thing from 2011-2018 as expected.

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